CIBC posts $420M impairment charge; $123M in loan losses linked to FirstCaribbean
TORONTO - CIBC (TSX:CM) is recording a $420-million, non-cash goodwill impairment charge in its second quarter related to "challenging economic conditions" with its investment in CIBC FirstCaribbean International Bank Ltd.
The bank said after markets closed Thursday that the charge does not affect its ongoing operations.
As a result, CIBC is also recording $123 million of after-tax of loan losses related to the Caribbean bank, due to revised expectations about economic recovery in the region.
Shares in the bank were halted prior to the announcement.
CIBC is scheduled to report results for its latest quarter on May 29.
Late last year, the bank announced that it was cutting FirstCaribbean staff by 10 per cent due to tough economic conditions in places like Barbados and the Bahamas.
FirstCaribbean has more than 3,400 staff at 69 branches, 22 banking centres and seven offices across 17 islands in the Caribbean. CIBC became the majority shareholder in the bank in December 2006.
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